Commercial electric companies: how to choose a business electricity provider in Australia

Choosing between commercial electricity retailers can feel confusing, especially when your bill includes network charges, demand charges, and contract terms that are easy to overlook. This guide explains how commercial electric companies work in Australia, what really drives business electricity pricing, and how to compare offers in a way that reduces risk and total cost, not just the headline cents per kWh.

What commercial electric companies do in Australia

In Australia, most businesses buy electricity from an energy retailer, commonly referred to as a commercial electricity company. Retailers sell electricity to your business, issue your bills, and manage your contract. The physical poles and wires are owned and operated by your local distribution network service provider (DNSP), and the wholesale market is operated by the Australian Energy Market Operator (AEMO).

It helps to separate who does what:

Generators: produce electricity (coal, gas, hydro, solar, wind).
Networks (DNSPs): deliver electricity to your site and set network tariff structures.
Retailers: sell electricity to your business, manage contracts, and bill you.
Metering providers: install and maintain meters and provide meter data (often arranged via the retailer).

Retail competition exists in the National Electricity Market (NEM) across NSW, VIC, QLD, SA, ACT, and Tasmania, and in WA’s SWIS there is competition for many business customers depending on location and metering. The right retailer and contract structure depends on how and when your business uses electricity.

How business electricity pricing is structured

Business electricity costs usually include a mix of charges, and the cheapest offer is not always the lowest cents per kWh once demand and network costs are considered.

Common components on a commercial electricity bill

Usage charges: cents per kWh, sometimes split into peak, shoulder, and off-peak.
Demand charges: based on your highest demand (kW) over a period, common for interval-metered sites.
Network charges: set by the DNSP, often the largest cost component for many sites.
Environmental and market scheme costs: for example LGC/VGEC related costs depending on product structure.
Retailer fees: supply charges, billing fees, and other pass-throughs depending on contract type.

When comparing commercial electric companies, you want to compare the total delivered cost for your specific load profile, not a single rate in isolation.

What influences commercial electricity rates

Commercial electricity prices can move over time due to:

Wholesale market movements: driven by generator availability, weather, demand, and outages.
Fuel and input costs: particularly gas price dynamics that affect electricity generation costs.
Network tariff changes: networks update tariffs, often annually, and reclassification can materially change your bill.
Your own demand profile: a single short spike in demand can increase demand charges for a full billing period.
Regulatory and policy changes: changes to market rules, environmental scheme costs, and state-based settings.

If your bill changes month to month, it is often a combination of usage, demand, and tariff structure rather than retailer “putting prices up” in a simple way.

How to compare commercial electric companies effectively

A good comparison approach for business customers focuses on risk, contract terms, and how charges map to your usage.

1) Start with the right data

To compare properly, you typically need:

Recent bills (12 months if available)
Meter details (NMI in the NEM)
Interval data for larger sites, where available
Site details (operating hours, equipment, HVAC, refrigeration, production schedule)

2) Check the network tariff and demand set-up

Network charges are not set by retailers, but your network tariff selection and how your demand is measured can heavily influence total costs. Businesses often benefit from a tariff review, especially after operational changes like new equipment, solar, or changes in trading hours.

3) Compare contract types, not just price

Commercial contracts can be structured in different ways, for example:

Fixed price: more budgeting certainty, but ensure the pass-through list is clear.
Variable or flexible pricing: may track market movements, can suit some risk appetites but adds volatility.
Block and flex or blended structures: common for larger users, mixing fixed hedged blocks with some exposed load.

Key terms to compare include credit requirements, billing frequency, pass-through definitions, make-good clauses, termination fees, and what happens at end of term.

4) Look for hidden cost drivers

When assessing offers from commercial electric companies, it is worth checking:

Supply charge vs usage charge trade-offs
Peak period definitions and seasonality
Demand charge calculation method and thresholds
Any minimum spend clauses or usage bands
Fees for additional sites, paper bills, or special reporting

Common mistakes businesses make when choosing a retailer

Rolling over at contract end: default or standing-style pricing can be materially higher than negotiated offers.
Choosing on headline rate only: ignoring demand and network impacts.
Not aligning contract timing with market conditions: waiting until the last minute can reduce your options.
Not reviewing after operational change: new equipment or extended hours can change the best tariff and plan.
Ignoring site-by-site differences: multi-site portfolios often have outliers that can be fixed with targeted work.

How to reduce commercial electricity costs

Reducing costs usually involves a combination of procurement and operational improvements.

Procurement actions

Compare retailers and negotiate contract terms before renewal
Validate bills to ensure charges match contract and tariff settings
Review network tariff selection annually, especially for demand-based sites

Operational actions

Reduce peak demand where practical (stagger start-up, manage HVAC, avoid coincident peaks)
Improve efficiency with lighting upgrades, controls, and maintenance
Consider on-site solar and other behind-the-meter options where they stack up

How Zembl helps businesses compare and switch

Zembl helps Australian businesses compare commercial electric companies and secure a plan that suits their load profile, risk appetite, and budget.

Fast comparison: we review your bills and compare options across our retailer panel.
Clear breakdown: we explain the drivers of your costs, including tariffs and demand impacts where relevant.
End-to-end switching support: once you choose an option, we handle the paperwork and the change process.
Support for larger users: tenders, contract structuring, and renewal management for commercial and industrial portfolios.

If you want a starting point, you can also review our resources on commercial pricing and comparisons, then request an obligation-free review.

Related Zembl resources

Frequently asked questions

Can I switch commercial electricity retailers without disruption?

In most cases, switching retailers does not interrupt your electricity supply because the network continues to deliver power. The change is primarily billing and contract administration. Timeframes depend on your meter type, site details, and state processes.

How early should I review my business electricity contract?

Many businesses benefit from starting the review several months before expiry. Larger users with more complex contracts often begin earlier so there is enough time for data review, tendering, and internal approvals.

Are commercial electricity rates the same in every state?

No. Retailer availability, network tariffs, and wholesale conditions differ by state and distribution area, so the best offer is location and meter dependent.

What should I prepare before requesting a comparison?

Your latest bill is usually enough to start. For larger or interval-metered sites, interval data can improve the accuracy of comparisons and demand-related recommendations.

Next step: If you want to check whether you are paying more than you should, request a free review and we will compare options across our retailer panel and explain the trade-offs clearly.